Payday Loans

Get cash now with a payday advance loan

Payday loans are quick, small-sum loans made to people who have a short-term money shortage. They are intended to cover your shortfall until your next payday, when you should pay the loan back in full. Payday loans are sometimes also called fast cash loans, payday advance loans or paycheck advances.

How Payday Loans Work

To get a fast cash advance from a payday lender, you need to present proof of employment, generally in the form of a pay stub from your workplace. You will then be tendered a loan for the amount you need; the maximum you can borrow is generally determined by your weekly salary. Most lenders won't let you borrow more than the take-home pay you earn in a single pay period.

Many instant loan companies will ask you to write a post-dated check when you receive your loan. This check will cover the amount of your loan, plus the interest which will accrue. Then, when your next paycheck is deposited into your bank account, the lender will cash your post-dated check and recover the money they loaned you.

Using Payday Loans Responsibly

Interest rates on payday loans are very high. While the prospect of getting such a fast loan is attractive to consumers who just need a little extra money, you can get yourself in trouble unless you're careful about how you use them.

Most fast cash loans come at a rate of interest between 15 and 30 percent for the loan period. Thus, if you borrow $1,000, you will owe the lender between $1,150 and $1,300 when you pay the money back. This translates to an extremely high annual percentage rate (APR) of between 390 and 780 percent.

Because of this, payday loans have come under scrutiny because they take liberties with existing usury laws. Many jurisdictions have imposed limits on the amount of interest lenders can charge on fast cash advance loans; for example, in Washington DC in 2008, lawmakers capped the interest rate at 24 percent over the loan period.

To protect yourself, you should only use fast cash loans when absolutely necessary. Take them out only to cover important expenses, like rent and food, or for emergencies. Using them to buy things you don't have enough money for because you spent your whole paycheck already is not a good habit to get into. Given the high interest rates, you can very quickly end up deeply in debt if you get behind on repaying these loans.